December, 2012 Archives
by Riaan Nel in Global Investments
Here is a link to Rob Arnott’s article on the 3-D Hurricane the developed world is facing: http://www.rallc.com/Our%20Ideas/Insights/3D%20Hurricane/Pages/Home.aspx. This is such a powerful thesis for what we are facing! Deficits, Debt, and Demographics – the 3-D Hurricane. The chart above compares the debt levels of the developed world versus emerging countries. Arnott’s thesis stakes a claim (and a strong one if you ask me) firmly in the camp of those that believe we face an inflationary future versus those that predict depressions and deflation. As I’ve said many times before, we can’t even predict the weather 3 days out. But we have to try and project, because we have to plan. The future is important, we’re going to spend the rest of our lives there. Arnott provides a sobering look into one possible future (if we’re all alive Saturday morning December 22nd), and in my estimation, a very probable future.
by admin in Global Investments
Here is a link to an article by Thomas Grennes and Andris Strazds regarding te US sliding down the investment slope (http://www.economonitor.com/thoughtsacrossatlantic/2012/11/26/the-u-s-is-sliding-down-an-investment-slope/?utm_source=contactology&utm_medium=email&utm_campaign=EconoMonitor%20Highlights%3A%20A%20Servant%20of%20Three%20Masters). The authors reference an article in the Wall Street Journal which reports that half of the 40 biggest publicly traded corporate spenders in the US announced plans to curtail capital expenditures this year and next. The long-term implications for the US economy of a decline in capital formation will inhibit future economic growth.
The data discussed in the posting supports the thesis of a slower trend line for US growth with concomitant consequences for the performance of the equity markets.